What happens if my bad check causes a check to bounce?

The following question was submitted to John Roska, an attorney/writer whose weekly newspaper column, "The Law Q&A," runs in the Champaign News Gazette.

Question

I deposited a check into my account that bounced. That caused a check I had written to bounce. My bank charged me a fee when the check I had deposited bounced, and for when my own check bounced. The place I wrote my check to threatened to sue me for damages. How many different fees can I be charged for a bad check, and what’s my total liability?

Answer

You’re talking about two different bad checks: the one you received, and the one you wrote. Your bank charged you for depositing a bad check, and for writing your own. Whoever got your bad check can enforce the legal rights your bad check created. You could try to enforce those same rights against whoever wrote the bad check to you.

The bad check you received triggers a fee your bank charges you. That covers their cost of reversing the “provisional” credit they’d given you, and of returning the bad check to you.

Your own bad check triggers several different liabilities. As with the bad check you received, your bank charges you an NSF (non-sufficient funds) fee to cover the cost of bouncing your rubber check back to the unlucky recipient. That “payee” must then decide what to do about your rubber/NSF check.

The fee your bank charges you for your own NSF check (US average in 2011: $30.83) is usually much more than the actual cost of bouncing your check back to the payee. Bank fees are generally unregulated. You can shop around for another bank, but not many promote low NSF fees to attract check bouncers.

The payee can try to enforce your promise to pay the face amount of the check. They can also demand a $25 bad check fee, permitted by Illinois law. To get it, the payee must make a written demand that gives you 30 days to make the check good, and pay the fee.

The payee could also try to sue for three times the amount of the check. Those triple damages are permitted by another law, as an alternative to criminal charges. Before filing suit, the payee must send a different 30 day notice by both certified and regular mail. That notice must explain that you can avoid the damages by just paying the check’s face amount, court costs, and attorney fees any time before the case actually goes to trial.

The minimum damages are $100, and the maximum $1,500. To get any damages, the payee must prove you wrote the check “with intent to defraud.” That’s assumed if your account had insufficient funds when you wrote or delivered the check, or if it bounces “on each of 2 occasions at least 7 days apart.”

Finally, there’s the possibility of criminal charges for deceptive practices. That’s a Class A misdemeanor—maximum penalty 1 year and $1,000. It becomes a Class 4 felony—maximum 3 years—if you obtain at least $150 worth of property within 90 days with your bad check(s).